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Rexford (REXR) Boosts Portfolio, '22 Investments Reach $993M

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Rexford Industrial Realty, Inc. REXR recently announced that it has shelled out $218.4 million for the acquisition of six industrial properties in prime infill Southern California submarkets. With these buyouts, Rexford’s investments reached $993 million so far in the year. Also, more than $700 million in additional investments is under contract or accepted offer.

Reflecting positive sentiments, shares of REXR were up marginally to $57.35 during Wednesday’s trading session.

These acquisitions are a strategic fit for Rexford as Southern California is considered to be a highly valued industrial property market with high occupancy levels and supply constraints in the United States.

Per Howard Schwimmer and Michael Frankel, Co-Chief Executive Officers of the company, “Tenant demand for Rexford Industrial's high quality, irreplaceable portfolio continues at historically high levels as demonstrated by the nearly 1 million square feet of leases executed during April and May at leasing spreads of 86% and 63% on a GAAP and cash basis, respectively."

The abovementioned properties, acquired in June, were funded using a combination of cash on hand and the company's line of credit.

Within the LA — Greater San Fernando Valley submarket, Rexford acquired 14350 Arminta Street, Panorama City, for $8.4 million and 29125 Avenue Paine, Valencia, for $45.0 million. In the LA — South Bay submarket, REXR acquired     2400 Marine Avenue, Redondo Beach, for $30.0 million, 14527 and 14434 San Pedro Street, Los Angeles, for $49.1 million and 20900 Normandie Avenue, Torrance, CA, for $39.9 million. Also, the company purchased 15771 Red Hill Avenue, Tustin, CA, within the OC — Airport submarket for $46 million.

With low vacancy rates, these submarkets display the solid demand for industrial real estate properties.

In addition to these markets and several others, the demand for industrial real estate space has been shooting up amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. Apart from the fast adoption of e-commerce, industrial real estate is anticipated to benefit from the likely rise in inventory levels over the long haul, thereby opening prospects for Rexford and other industrial REITs like Prologis PLD and Terreno Realty Corporation TRNO.

Rexford is poised to gain traction from its robust market fundamentals, with a fortress-like balance sheet and an impressive acquisition track record.

Shares of Zacks Rank #2 (Buy) REXR have declined 1.6% over the past year, narrower than the industry’s fall of 13.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment Research
Zacks Investment Research

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Prologis carries a Zacks Rank of 3 (Hold) at present. Prologis’ long-term growth rate is projected at 9.8%. The Zacks Consensus Estimate for PLD’s 2022 funds from operations (FFO) per share has been revised marginally upward in the past two months.

Terreno Realty holds a Zacks Rank of 3 at present. The Zacks Consensus Estimate for TRNO’s 2022 FFO per share has been revised a cent upward in the past three months.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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